A Growing or Shrinking Industry: You Decide

We’ve come far in the past two years, but don’t forget what we’ve lost over the last 10.

By Sean Cota, NEFI & Tom Tubman, AEC

Since September 2019, the liquid heating fuel industry’s federal and state advocacy efforts have resulted in some big wins. Unfortunately, our opponents have seen even bigger victories. Today, we have reasons to be excited about the future of our industry, as well as reasons to be very, very afraid.

Renewable liquid heating fuels offer America the quickest, most cost-effective and energy-secure path to net-zero emissions, and offer our Main Street businesses a path to real and sustainable success for future generations. However, the utilities and their allies are doing everything they can to wipe us off the map.

Over the past two years, liquid fuel industry advocates have come together like never before to defend our businesses and fight for their future. There has been an unprecedented degree of coordination among and between state and national associations. This column — a collaboration between NEFI and AEC — is but one example. Our groups have also worked with the National Oilheat Research Alliance, Oilheat Manufacturers Association, National Biodiesel Board and Advanced Biofuels Association.

Our combined efforts have yielded big wins. The USDA Higher Blends Infrastructure Incentive Program recently awarded four grants to liquid heating fuel suppliers across the Northeast. That’s on top of five grants that were announced last April. NEFI and allies in the biofuel sector fought hard to ensure that our fuel suppliers would be eligible for the grant program, which is now projected to increase sales of advanced biofuels in the Northeast by over 470 million gallons. This shows that our national advocacy efforts can and do lead to substantial investments in our industry, especially when we work together and tell our story convincingly.

Heating oil is unique in its ability to deploy massive amounts of renewable fuels of nearly every type. We can help the utilities in their electrification efforts and prevent grid peaking and massively reduce emissions in the process. Remember, the Northeast grids remain heavily dependent on fossil fuels during high-demand — i.e., peaking — periods. When you factor in electricity’s significant transmission losses, this makes for terrible energy efficiency and an even worse carbon footprint. In other words, during the coldest part of the winter, switching to electric heat pumps would have exactly opposite the intended effect.

On the other hand, if the utilities want to electrify everything else, blended heating fuel, with its lower carbon profile and superior energy storage capacity, can play a bigger role in the clean-energy economy than natural gas and other fossil fuels. This should provide our industry a unique market expansion opportunity. We can reclaim customer accounts previously lost to natural gas conversions and grow our base for the first time in a generation, but only if we present our case convincingly to consumers, public officials, regulators and policymakers. 

No doubt, we have made some great strides. But we must not forget or ignore how much we lost across the decade prior.

According to the U.S. Census American Community Survey, in 2010 there were 5.8 million homes using heating oil in the nine-state Northeast (New England, New York, New Jersey and Pennsylvania). By 2019, that number was down to 4.4 million. That’s a loss of 1.4 million customer accounts, or approximately 25 percent of the market. Across the 12 East Coast states from Maine to Virginia, our industry lost more than 1.5 million customers from 2010 to 2019.

The utilities and their allies succeeded in taking away one-quarter of our market over last decade, and they’re planning to do the same or worse this decade. Regional grid operator ISO New England projects that more than 1.1 million electric heat pumps will be installed from 2021 through 2030, and that’s just in the six New England states.

This is why NEFI and AEC are launching the Survive & Thrive Fund in 2022, and it’s why we’re calling for all liquid heating fuel dealers to help us fight back now by making a contribution at nefi.com/donate and americanenergycoalition.com/donation.

We could have a growing and prosperous future, or we could continue to let the utilities and their allies chip away at our base until there’s nothing left. Please make the right choice. 

Sean Cota is the President and Chief Executive Officer of NEFI. He can be reached at sean.cota@nefi.com. Tom Tubman is Executive Director of AEC. He can be reached at conn.tubman@cox.net.